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These are the strategies behind China’s ambitious clean energy transition

The country leads the world in terms of total wind and solar energy installed and is poised to be the primary supplier of the clean economy.

China Dream poster

People passing by big political posters made by government promoting Chinese dream and standard. Image via Shutterstock/B. Zhou

China has acted swiftly in recent years to catalyze a transition to a cleaner economy and position itself as the manufacturer of a greener future. 

According to a United Nations Environment Programme report, "Global Trends in Renewable Energy Investment 2019" (automatic PDF download), China has been the biggest investor in renewable energy over the last decade, spending nearly $760 billion between 2010 and 2019, double the $356 billion investment made by the U.S. The entire continent of Europe came in a close second, at $698 billion invested. 

As a result, China not only leads the world in terms of total wind and solar energy installed — with a total of 288 gigawatts of wind energy capacity and 253 gigawatts of solar energy capacity at the end of 2020 — it also has positioned itself to be the primary supplier of the clean economy.

According to media organization Foreign Policy, 30 percent of the world’s wind turbine manufacturers are in China, and over 70 percent of the world’s solar photovoltaics are manufactured by the country. What’s more, China controls nearly the entire supply chain prior to final assembly of electric vehicles, the site reports.  

The move to control most of the clean energy supply chain is just one part of China’s approach to this transition. Other factors, including an entrepreneurial approach to testing economic initiatives, an authoritative government structure that facilitates rapid action and a philosophy around communicating the future to citizens, are driving the transition happening within China’s borders, according to experts who spoke on a recent panel at this year’s VERGE 21 conference.

Unique strategies

In addition to investing heavily in its clean energy infrastructure, China is also taking an entrepreneurial approach towards climate innovation by running and scaling pilot climate finance programs.

In 2017, China launched five green finance pilot zones in Zhejiang, Jiangxi, Guangdong, Guizhou and Xinjiang provinces, as climate-friendly versions of China’s existing economic development zones, according to think tank Paulson Institute. 

"The idea is to experiment with climate-friendly transactions," said Marilyn Waite, managing director of the Climate Finance Fund, during a discussion at GreenBiz’s annual VERGE 21 conference last week. Waite provided the example of the Bank of Jiangsu, the first bank in China to launch a solar photovoltaic loan that is part mortgage of the photovoltaic equipment and part loan guarantee.

The speed at which the Chinese government is able to work has been another key driver of the rapid transition that is underway, according to Peggy Liu, chairperson of the Joint U.S. China Collaboration on Clean Energy (JUCCCE). During the discussion, Liu shared her experience on introducing smart grid, a digital technology that allows for two-way communication between a utility and its customers, into China. "When [JUCCCE’s China Smart Grid Cooperative] brought smart grid into China in 2007, it only took 2.5 years before [the State Grid Corporation of China] committed $7.2 billion to implement smart grid across the country, covering 80 percent of the landmass," Liu said. 

Underlying these high-level clean economy initiatives is a country-wide storytelling campaign, led by Liu and the JUCCCE team.

A rebranded version of the China Dream, President Xi Jinping’s slogan for his campaign to rejuvenate China, Liu’s version instead paints a picture of clean air and water, liveable communities and an environmentally friendly lifestyle, according to the JUCCCE website.

Working with agencies such as Saatchi and Saatchi S, Ogilvy Green and Edelman, "[JUCCCE] did workshop after workshop, literally drawing with pens and colored pencils on paper what the China Dream would look like, and we curated that to really embed images of sustainability into a future lifestyle," Liu said. "You have billboards in subway stops and on construction walls, you have advertisements and commercials … and that builds this energy, this angular momentum, this vortex of people all helping, subconsciously, to make the China Dream come alive."

These factors, combined with a massive amount of financial investment, have enabled China to move towards its own sustainability goals and position itself as the supplier of the clean economy. If other countries also wish to achieve their nationally determined contributions under the Paris Agreement, they must rely on China’s clean energy manufacturing power. The strategies that China has employed during its transition are worth a note as well.

"I really want people to shift away from looking at China as the competition, because there is no competition in this race," Liu said. "The only thing we should be thinking about is how we communicate and connect with China, in a way that is geopolitically palatable, where we create a new way for everybody to win."

[ Missed VERGE 21? Get up to speed with our coverage of the event. ]

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